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Miliband pledges English devolution

English cities and regions would get increased control over housing, transport and skills under plans for a major expansion of devolution being proposed by Ed Miliband.

The Labour manifesto will promise to at least double the funding in local hands to cut the "productivity gap" between London and the rest of the country and create jobs, he will say.

In a speech in Birmingham, he will promise to "reverse a century of centralisation" by rebalancing the economy away from the capital.

He will hail the move as another signal of his determination to focus on the "cost of living crisis" despite expectations that wage growth might at last outstrip inflation this year.

Every local authority, university and local enterprise partnership (LEP) has been asked by the party to submit plans for how they would "boost growth and private sector jobs".

Those deemed to have met "strict" criteria within the first nine months of a Labour government and to have showed they were "willing to put the private sector at the heart of decision making" would be handed the new powers.

That could mean an extra £2 billion a year being taken out of Whitehall control, double current Government proposals, he will suggest.

The policy has emerged from a review of growth policies carried out by former minister Lord Adonis and comes with Mr Miliband under pressure to produce attractive policies amid reports of tensions within Labour's general election team.

He will accuse the Government of failing to take up good ideas put forward in its own review - carried out by Lord Heseltine - and say he has asked Lord Adonis to "examine every line" of that report to see whether "significantly more" could be devolved.

Mr Miliband is expected to say: "Cities and towns that agree to come together with local businesses to plan for their economic future will be given historic new powers over funding for infrastructure, skills and economic development.

"They will be able to invest directly in transport and housing, as well as having greater say over skills with local businesses for the first time controlling the funding of apprenticeships.

"They will also lead on delivering the Work Programme with city - and county - regions able to use their local knowledge to decide which providers to use to get people back to work.

"And towns and cities will be given clear incentives too: by being able to share in the proceeds of growth in their area.

"With power of this sort comes responsibility. These changes will only bring new jobs, greater prosperity, if the towns and cities are willing to put the private sector at the heart of decision making.

"So today, Ed Balls and I have written to every local government leader, every local enterprise partnership and every university asking them to work together and prepare for the next Labour government as part of our plan to close Britain's productivity gap.

"Each and every authority which can bring forward plans of this sort in the first year of the next Parliament will receive powers and access to resources from Whitehall the like of which we have not seen in living memory: real powers for Britain's towns and cities to make the difference, to help create the jobs we need, and the conditions for business to succeed."

UK prosperity is built "far too much" on London, he will warn.

"We need a prosperous London, but we also need to build prosperity outside it. Today, every region outside London is below the national average when it comes to productivity, while London is 40% above it.

"Britain will never tackle the cost of living crisis and create the new private sector jobs that are essential to doing so unless we break this pattern, reverse a century of centralisation, and change from an economy based on the success of one city to all of our country's great towns and cities: a truly One Nation economy."

Attacking the Tories for failing to take devolution seriously, he will say: "Michael Heseltine's review called for a massive devolution of funding from Whitehall to the cities.

"But David Cameron and George Osborne allocated just £2 billion for a local growth fund in their spending review for 2015-16. The best report this Government has produced has been the one that they have most ignored.

"We can and must do a lot better than that."

Conservative Party chairman Grant Shapps said: "Once again Ed Miliband is talking about a problem which the Labour government that he was at the centre of created.

"Labour's great recession made people who work hard poorer, and their unbalanced economy saw just one job created in the North and Midlands for every 10 created in the South.

"Our long-term economic plan to secure a better future for the whole of Britain is about creating jobs in every part of our country, meaning more people having the security of a regular pay packet. That's the only way to raise living standards for everyone.

"But Ed Miliband has no plan. All he offers is short-term quick fixes, and more spending, more borrowing and more taxes. That's exactly what got us into a mess in the first place, and hard-working people will pay the price with a less secure future."

Lee Hopley, chief economist at manufacturers' organisation EEF, said: "The principles outlined today are worthy of debate, however a key factor will be allowing LEPs to prove themselves before more funds and capabilities are devolved.

"Crucially we need to ensure that whatever LEPs are assessed against include a focus on genuine place-based challenges and business-led solutions.

"When it comes to choices about getting value for money from limited resource in the next spending review, the next government will need to carefully weigh the pros and cons of an incremental approach, which allows LEPs to prove themselves in a more structured way, against the challenges of a big bang devolution of funds."

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